Wal-Mart cutting 11,200 jobs

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Retail giant Wal-Mart has said that it is cutting 11,200 jobs at its Sam's Club warehouse chain in the US.

The majority of the cuts will hit staff running in-store promotions at the chain, after Wal-Mart decided to outsource these functions.

Last November, Mike Duke, Wal-Mart's chief executive, said that the trading environment for the whole group continued to be "difficult".

Sam's Club employs about 110,000 staff across 600 stores.

In-store promotions and product sampling will now be outsourced to marketing company Shopper Events in an attempt to win more customers and boost flagging sales.

Staff were told the news at meetings on Sunday morning.

'Lagging' business

Sam's has tried to steal customers from rival warehouse stores such as Costco Wholesale by offering more everyday goods like food and health and beauty items, and cutting back on furniture and clothes.

But revenue at Sam's slipped nearly 1% to $11.55bn in the last quarter, while Wal-Mart stores reported a 1.2% sales increase to $61.81bn. Earlier this month, Wal-Mart Stores closed 10 underperforming Sam's Club locations, with 1,500 job losses.

"Sam's has been the relative laggard," said Craig Johnson, president of retail consultancy Customer Growth Partners. "It has lagged relative to its direct competitors, Costco and the smaller BJ's Wholesale Club,'' he said.

Sam's chief executive Brian Cornell said the move to outsource promotions was "not a cost cutting measure. It's really an investment in enhancing our demo programme."

Shopper Events plans to hire "roughly the same number of people" being cut, and Sam's workers are invited to apply for those positions, he said.